Medigap Plans in Alabama – What Are Your Best Options?

Nearly 1 million people in Alabama are age 65 or older, and most of them are on Medicare. In this blog post, we will discuss the best Medigap plans available to seniors in Alabama.

Medicare is a vital safety net when it comes to protecting millions of American seniors from the high costs of medical care. But it’s not designed to work by itself. Basic Medicare (Parts A and B) still leaves seniors at risk of incurring thousands of dollars in deductibles, co-pays, co-insurance costs, prescription drug charges, and medical care while traveling outside of the United States.

Medicare supplement insurance, also called “Medigap,”  is an important tool to help control that risk. Medicare beneficiaries pay a small but predictable monthly premium, and Medigap insurance steps in to help cover the “gaps” left in original Medicare coverage.

So Medigap beneficiaries pay much less out of pocket. With the most comprehensive plans currently available to new Medicare beneficiaries, patients pay nothing out of pocket for Medicare-approved services except for the $233 deductible under Medicare Part B. 

How Does Medigap Insurance Work?

Medigap coverage is supplemental insurance. That means Medicare is the primary payor, and Medigap it fills in where Medicare doesn’t pay. Once Medicare has paid its share, your Medigap coverage usually pays for the remainder, subject to plan limits.

Understanding Medigap Plans in Alabama

Medigap coverage comes in many different flavors. But to facilitate shopping and make plan comparison easier for Medicare enrollees, all Medigap plans are standardized by law. The basic features and coverages are identical nationwide (except in Wisconsin, Michigan, and Massachusetts).  

Currently, except in those three excepted states, there are ten Medigap plans in operation: Plans A, B, C, D, F, G, K, L, M, and N.

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Medigap Plan Standardization

Each Medigap plan is standardized: Every Medigap Plan G sold in Alabama provides the same Medicare benefits. Plan G is also the same no matter what state you buy it in (except for WI, MI, and MA).

While plan benefits are standardized across carriers, pricing is not. Different carriers can charge different monthly premiums.

Medigap pricing is based on several factors:

NOTE: Don’t confuse Medigap plan names with the different parts of Medicare. For example, Medigap Plan A is not the same as Medicare Part A, and Medicare Supplement Plan D is not the same as Medicare Part D, which is the prescription drug component of Medicare.

Plans F and C are Closed to New Enrollees

Medigap Plans F and C are both very popular. Both provide very comprehensive coverage. Plan F provides “first dollar” coverage for all Medicare Part A- and Part B-approved services. 

If you enrolled in Plan F, and paid your premiums, all Medicare approved services under Part A and Part B are completely covered, with zero deductible or cost sharing on your part. Plan C was very similar.

But in 2019, Congress determined that that was too sweet a deal, and that it was in the public’s best interest to have seniors bear at least some of the cost of care out of pocket. And so they closed Plans F and C to new Medicare enrollees.

You can only join plans F and C if you became eligible for Medicare on or before January 1st, 2000. Those older beneficiaries are “grandfathered in.” For anyone not yet eligible for Medicare as of that date, if you want the most comprehensive Medigap plan available, you’ll need to go with Plans G or N, described below.

What is the Most Comprehensive Medigap Plan in Alabama?

Since Plan F is closed, the next best thing is Plan G. Which is also the most popular of all the Medigap options.

Plan G covers everything in Part A and Part B – including all deductibles for hospitalizations, hospital costs up to an additional year after Medicare benefits are used up, co-pays for doctor visits, and your 20% coinsurance requirement under Medicare Part B, which covers physicians’ charges, lab fees, and durable medical equipment.

Plan G also covers up to 80% of medical bills incurred while traveling outside the U.S.

Plan G also covers physicians’ excess charges in states that don’t prohibit the practice. Those are charges doctors bill in excess of the Medicare reimbursement rate.

Under Plan G, the only out-of-pocket cost you would normally pay for services under Medicare Part A and Part B is your annual Part B deductible. As of 2022, that deductible is $233.

Medigap Plan G vs. Medigap Plan N in Alabama

Plan G and Plan N are very similar. But unlike Plan G, Plan N doesn’t cover physician’s charges over and above the Medicare reimbursement rate. Plan N can be a good choice for people in one of the eight states that prohibit excess physicians’ charges.

But Alabama isn’t one of them.

Most people in Alabama prefer Plan G over plan N for this reason: It eliminates exposure to “surprise” medical bills from doctors who charge more than the Medicare reimbursement rate for covered services.

High Deductible Plan G

Plan G is also available in a high deductible version that offers lower copays/coinsurance costs for those seeking something more closely related to a catastrophic coverage plan. 

The high-deductible version can be a great match for Medicare beneficiaries who are in overall good health, and who can absorb the annual deductible if they have an unexpected medical need.

As of 2023, the deductible for the high deductible version of plan G is $2,700. That deductible is adjusted annually for the cost of living. 

When Can You Sign Up for Medigap Plan G?

You must be 65 or older to sign up for Plan G, or you must have a qualifying disability. If you are not disabled and are 65 or older, you will also need to be currently enrolled in both Medicare Part A and Part B (Original Medicare).

At present, only two carriers in Alabama are willing to enroll people under age 65 with a qualifying disability: Blue Cross/Blue Shield of Alabama and United American Insurance.

The best time to sign up for Medigap is during your one-time annual open enrollment, which is a six-month window when you turn 65.

If you sign up during this window, you get the benefit of guaranteed enrollment. That is, you cannot be turned down due to your medical history.

If you miss this one-time annual enrollment window, you may still be able to sign up late if you have a guaranteed issue right.

How do you get a guaranteed issue right to enroll in Medigap after your initial open enrollment? There are three possible avenues:

Otherwise, you’ll have to go through medical underwriting to enroll in a Medigap plan. That means the insurance company has the right to reject your application because of your medical history. 

How Much Does Medigap Plan G Cost?

You’ll end up paying between about $120 and $364 per month for your Medigap Insurance. Why such a wide range? 

Since premiums among different carriers can vary so widely, it’s important to compare your options when it comes to Medigap plans in Alabama.

Healthsharing: An More Affordable Alternative to Medigap Plan G

Medigap Plan G policies are typically the priciest of Medicare supplement plans, since they provide the most comprehensive benefits.

But in recent years, a much more affordable non-Medigap alternative has been gaining in popularity: The Medi-Share 65+ plan.

Med-Share is a Christian healthsharing ministry, rather than an insurance company. It’s an association of more than 400,000+ contributing members who have agreed to share each other’s medical expenses.

The organization has been in existence since 1982, and has shared more than $4 billion in medical expenses since that time. 

Their Medi-Share 65+ is the first major healsharing plan designed specifically for the Medicare population.

How Medi-Share 65+ Works

With Medi-Share 65+, members are responsible for the first $500 in Original Medicare (Part A and Part B-approved out-of-pocket expenses each year. These  include deductibles, coinsurance, and copays.

After you cover the first $500, all further Original Medicare bills for the rest of the year are 100% shareable. You pay no further out-of-pocket costs for any medical services approved under Original Medicare.  

There are no annual or lifetime caps on sharing benefits, except for sharing requests related to motorcycle accidents, which are limited to $100,000 per year.

Like Medigap plans, Medi-Share 65+ does not share most prescription drug costs. For that reason, many members choose to combine their healthsharing membership with a stand-alone Medicare Part D policy. 

No limited provider network

Unlike Medicare Advantage plans and other traditional insurance plans, Medi-Share 65+ lets you use your plan with any doctor or provider. You can choose your own doctor, or use Medi-Share’s PPO network of 900,000 providers nationwide. 

Out-of-Pocket Costs Exposure vs. Medi-Share Plan G

Under Medi-Share 65+, your maximum out-of-pocket exposure for Medicare Part A and Part B services is $500 per year per family, not per individual. If two spouses are both Medi-Share 65+ members, their combined out-of-pocket exposure to Medicare Part A and B costs not paid by Medicare is still just $500. 

Under Plan G, your maximum-out-of-pocket exposure for Medicare Part A and Part B-approved services is limited to your Part B deductible, which is $226 as of 2023. However, that’s per individual, not per family.

Pricing

Medi-Share 65+ memberships have a flat rate of $99 for members ages 65 to 74, and $150 flat rate for members ages 75 and up.

Members enrolling before turning 75 enjoy a price lock-in guarantee until they turn 75.

This pricing compares very favorably to traditional Medigap Plan G insurance premiums, even after considering the higher out-of-pocket cost exposure. 

Limitations and Exclusions

Unlike Medigap plans, Medi-Share 65+ does not share costs arising from the following:

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The Best Medigap Plans in Alabama

Not every plan from every carrier is available everywhere in Alabama. Alabama residents may not be able to choose any carrier. But there are at least some Medigap choices available to all Medicare beneficiaries during open enrollment. 

Blue Cross/Blue Shield of Alabama

The venerable Blue Cross/Blue Shield of Alabama offers a series of Medigap plans to Alabama residences under the label “C Plus.”

The company offers all the most popular Medicare supplement plans.  They also throw in the “Silver Sneakers” fitness program at no additional cost.

Some Blue Cross Blue Shield plans also offer hearing exams and a hearing aid allowance, and many also have an allowance for routine eye exams and glasses or contacts.

To enroll in Medigap, you must be enrolled in both Medicare Part A and Part B, and not be enrolled in Medicare Advantage.

Cigna

Cigna is a well-established insurance carrier with a national footprint. For Alabama residents, Cigna offers:

Cigna offers competitive rates and several different discount options. You’ll also find other perks to signing on, including access to a 24/7 nurse hotline. However, the insurer does have a lengthy approval process that can take up to three days, and there are no options for vision or hearing coverage.

GPM Life

Government Personnel Mutual Life Insurance (GPM Life) might not have the name recognition of some other carriers, but it does offer Medigap plans in Albama, including:

There’s a one-time $25 application fee upon enrollment. Husband and wife joint applications must include two application fees (e.g., one check for $50), along with one months’ premium.  Monthly billing is not allowed.

While GPM Life isn’t as well-known as other carriers out there, it does have an A- rating from A.M. Best. You’ll also find that all the Medigap plans are serviced by Mutual of Omaha, which gives you access to that organization’s smartphone app, as well as their highly regarded customer service.

If you miss your initial enrollment period and you don’t qualify for a right to issue, you’ll need to answer health questions. If you have diabetes with complications, you could get turned down. For example, diabetes with eye/vision problems, numbness or tingling, or circulation problems could be cause for a decline.

However, if your diabetes is well-controlled with medication and/or insulin, you will be considered for coverage. They are looking for stability. That means they want to see no changes in diabetes medications for at least two years.

Hypertension (high blood pressure) will be considered stable if recent average blood pressure readings are 150/85 or better.

Mutual of Omaha

Many of you are probably familiar with Mutual of Omaha, if for no other reason than for their sponsorship of the Wild Kingdom TV show. The insurer also offers access to a wide range of different products, including a few Medigap plans, such as:

Mutual of Omaha only offers three plans directly (indirectly, it supports others through carriers like GPM Life). However, you do get access to award-winning customer service, as well as a convenient smartphone/tablet app.

Aetna Medicare Solutions

Aetna Medicare Solutions, a subsidiary of Aetna Health & Life Insurance, offers Medigap Plans A, B, F, a high-deductible Plan F, Plan G, and Plan N to Alabama Residents.

The company has a long history and a solid financial rating from A.M. Best.

They set premiums based on “attained age.” Which means your premium will go up as you get older. If you want a Medigap policy that allows you to “lock in” a level premium for life, you should consider a different carrier.

Overall, Aetna Medigap premiums are competitive, but that can vary by applicant, age, sex, zip, etc. 

United Healthcare 

United Healthcare is another familiar player in the health insurance industry and has been around for a long time. They are well known for their exclusive licensing agreement with the American Association of Retired Persons, or AARP, and have the sole right to the AARP label.

The carrier does offers several Medigap plans, including the following:

United Healthcare gets good reviews from customers and outranks several other leading carriers when it comes to their Medigap plans, including Aetna.

The Best Healthsharing Medigap Alternatives in Alabama

Medi-Share 65+

The Medi-Share 65+ healthsharing alternative comes with a rich set of value-added discounts and benefits. 

Specifically: 

• Medi-Share offers a drug discount program which allows members access to hundreds of commonly prescribed drugs at up to 70% to 80% off the retail price. 
• 24/7 telehealth access to board-certified MDs and other medical providers, with no copay.
• Medi-Share has also contracted with thousands of providers to provide members with special discounted prices on other services not covered under Original Medicare, such as vision and dental care and LASIK. 

Remember: Medi-Share 65+ is not a Medigap insurance plan, but a private non-profit Christian healthcare sharing ministry that facilitates sharing among its 400,000 members. 

The Takeaway

Medicare supplement insurance, or Medigap, helps provide vital protection against the devastating high costs of medical care. Without some additional protection, your combined deductibles, copays, and coinsurance costs can be significant, even with Medicare.

The most important thing to remember is that any given plan with the same letter covers the same benefits under any provider, so you simply need to find the price that works with your budget. Not all Medigap plans cost the same, so that’s why research is so important.

Almost all providers must increase their rates a bit each year. But not all of them. Some of them lock in pricing for life if you enroll when you are first eligible. Other plans have unique underwriting approaches, or structure their pricing differently than others.

By working with a licensed broker or Personal Benefits Manager, you can make it more likely that your rates won’t go up any more than expected.

If you prefer to talk to someone about your specific needs, or if you need further assistance to choose the plan that’s right for you, our Personal Benefits Managers are here to serve you! Schedule a free consultation now!

While Plan G is the most comprehensive and the most popular plan open to new enrollees, that doesn’t mean it’s the right one for your specific needs.

Learn more about your Medigap plans in Alabama:

Learn more about Medigap plans in other states: